Credit Card Calculators

Credit Card Learning Center

Virtual credit card

The Internet is good for virtual this and virtual that. It's also
responsible for the virtual credit card. The wired world has opened the
doors to a lot of things, some of them bad. Stolen identities and stolen
credit card numbers are among them. The virtual credit card is part of
an arsenal of tools aimed at defeating the bad guys.

Almost 10 million Americans were victimized by identity thieves in 2002.
Theft related costs to businesses totaled $48 billion and people like
you and me lost a total of $5 billion, according to the Federal Trade
Commission.

The weakness of credit cards has been that long string of 16 numbers,
otherwise known as your card number. Thieves were raiding the garbage to
find those numbers printed on sales slips. They would then make
telephone or online purchases with the stolen number. Credit card
companies, smarting from billions in losses, issued a second number,
printed on the back of the card. Buy something online now and you are
asked to supply this number, too.

Random numbers generated
But with billions of credit cards in circulation, and hundreds of
millions of online transactions every day, there is plenty of
opportunity for credit card numbers to be stolen. So now there is the
virtual credit card. It doesn't quite resort to virtual numbers, but
close. Every time you use a virtual credit card, a new random credit
card number is issued. And it's good only for the transaction you are
making at that time. Were a hacker to get hold of the number, it would
be useless to them.

The biggest fear of online shoppers is that their credit card data and
other personal information will be stolen. By issuing virtual numbers,
card issuers hope to encourage more online shopping while also cutting
their losses due to fraud. If they are successful, we could see APRs
drop across the board.

The virtual credit card is not a separate piece of plastic. If your card
company issues virtual numbers, all you have to do is register your
current card to take advantage of the program.

Free service
The service is free to holders of Citibank credit cards. To use the
technology, you simply download special software and provide a user name
and password. When you want to buy something online, you enter that user
name and password for authentication and a random substitute credit card
number is generated. This random number is transferred into the
retailer's checkout form. It then cannot be used at any other retailer
site. Each random number is tied to the cardholder's actual Citibank
card.

Discover's Deskshop offers different technology developed in Ireland. It
also uses virtual credit card numbers, but it also takes away the chore
of filling out those long online checkout forms. Once you hit the
checkout to complete your online shopping, a virtual credit card pops up
on the screen. Click and it fills out all the details and provides the
merchant with a virtual number. It even shows you how much credit is
left on the card and lets you look at your account.

Technology for virtual credit cards has been around since 1999, when
they were first issued in Europe. Among other issuers are MBNA, American
Express, Visa and MasterCard.

One of the side advantages of these cards is that they have an expiry
date. That gets around that annoying problem of subscriptions being
renewed automatically when, perhaps, you don't wish them to be.